FINRA Securities Industry Essentials Exam (SIE) SIE Question # 68 Topic 7 Discussion
SIE Exam Topic 7 Question 68 Discussion:
Question #: 68
Topic #: 7
A customer purchased $80,000 of Fund XYZ two years ago. He now wants to buy $50,000 of Fund LMN offered within the same fund family, which offers a $100,000 breakpoint under right of accumulation. Which of the following statements is true?
A.
The additional investment qualifies for a $100,000 breakpoint.
B.
Each fund requires contributions of $100,000 to qualify for a breakpoint.
C.
The customer must sign a new letter of intent to receive the $100,000 breakpoint on the additional purchase.
D.
The customer will receive a sales charge discount on his next purchase after the account balance of the fund reaches $100,000.
Right of Accumulation: Allows an investor to combine the value of existing investments within the same fund family to qualify for a breakpoint (reduced sales charge) on new purchases.
Current Holdings: $80,000
New Purchase: $50,000
Total: $130,000, qualifying for the $100,000 breakpoint.
Incorrect Options:
B: Contributions from all funds within the same family can be aggregated.
C: A new letter of intent is unnecessary; right of accumulation applies automatically.
D: Discounts apply immediately, not retroactively.
FINRA Guidance on Breakpoints: FINRA Breakpoints.
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